Written By ARTHUR ROBERT | Franchise Times -April 28, 2022
Chaac Foods is on a development warpath. Last year, the company signed a sizable franchise agreement with Dickey’s Barbecue Pit to open 48 stores over five years, and inked a deal with Bojangles to buy 40 corporate stores and open 40 more. And earlier this year Chaac signed on to develop multiple Jimmy John’s units as part of its increasingly diversified portfolio.
Chaac Foods co-founder and CEO Luis Ibarguengoytia said the pace of dealmaking comes down to opportunity. The company’s agreements with Dickey’s and Jimmy John’s focus on the East Coast between Washington, D.C. and New York City, said Ibarguengoytia, where he’s also developing Pizza Hut restaurants. By opening “double or triple restaurants” in the same area, Ibarguengoytia said Chaac Foods could better utilize space, and get better deals on real estate.
Pizza Hut restaurants require 1,200 to 1,400 square feet, which is often less space than a landlord wants to lease out, Ibarguengoytia explained. “By adding brands to our development, we found that we were able to find a lot better real estate,” he said.
Jeff Gruber, senior vice president of development at Dickey’s, said the company was interested in the agreement with Chaac Foods because it concentrated on a part of the country the brand hasn’t yet penetrated.
“Everywhere is a good fit for Dickey’s,” Gruber said, but he acknowledged the Northeast doesn’t have the same kind of barbecue culture a state like Texas or other parts of the South might have. Handing over a new and challenging part of the country to a large and experienced franchisee such as Chaac Foods was an attractive proposition.
Ibarguengoytia said they opted to sign with Dickey’s because it was a clear leader in the barbecue space. Chaac Foods wanted barbecue and Dickey’s wanted someone in the Northeast. “It was a perfect match,” he said.
The deal with Bojangles worked out a little differently. It’s both buying and developing restaurants, all outside of the Southeast. But Bojangles was selling 40 stores, and Chaac Foods jumped at the opportunity.
The sale was the result of the annual review process at Bojangles, which at the time owned 40 percent of its system, said Jose Costa, chief growth officer for the company. It wanted to concentrate those operations in the Carolinas, he explained, and hired audit, tax and advisory firm KPMG, which recommended selling off a package of 40 restaurants, largely concentrated in Georgia.
The conversation began as an acquisition deal for the 40 restaurants but quickly expanded to include development. “The franchisor wanted more stores,” said Ibarguengoytia, and, not coincidentally, he was interested in building more.
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